Still Plodding Along

update

I am still actively participating in the markets. I took pretty much the whole of July and August off because I was either on holiday, didn't have any trade signals or couldn't locate my interest in the markets. And I got back to trading "proper" in September.

positions

1. Long Copper: Bought in November 2016 on a monthly bullish domino candle, "Trump/reflation trade" or whatever people are calling now. I'm up about 1R, it's pulling back but I'm not particularly bothered. My stop is more or less at breakeven, I haven't got any signals to sell and personally I think Trump will manage to do something vaguely pro-business, so just going to let it run.

2. Long GBPNZD: Bought this first week of September, it's sitting around +1R. Stop's at breakeven, it's going sideways, again just letting it run. I think the GBP is undervalued, Carney is a moron and the Kiwi economy is boring. I'm probably wrong on all fronts but I'm willing to live with that.

3. Long GBPJPY: Bought this second week of September it's sitting around BE. Stop's at 50%, it's going sideways, again just letting it run. Even if the UK is weak I think the BoE will raise rates slowly ( IMO 80% chance of 0.25% hike and 20% chance of 0.5% hike in November) and the BoJ is committed to buying Japanese bonds for well, ever. If I'm right I'll clean up, If I'm wrong, that's what the stops there for.

potential positions

End of the month and I've got some monthly candles to choose from. The bolded FX  is the direction I would be going.

• AUDCHF: Price action is stuck in a monthly range, so no.
• AUDJPY: Price action quite "step-py" which will likely make reaching PT and holding to PT difficult, so no thanks.
• CADCHF: Price action is stuck in a 3-year tight range, no.
• EURGBP: Not a huge amount of profit potential and I am too emotionally involved in this pair. 
• NZDCAD: The range makes PT pathetic.

• GBPJPY: Monthly bullish domino candle adds conviction to my current long GBPJPY trade, so might, on this rare occasion average down on a PB. 
• USDCAD: I like this one. The USD is oversold, Trump sentiment is so low, even him farting would surprise on the upside. The signals good and there is an easy 1:1.5 there. I'll have a go on this.

• EURCHF: I'm going to short this. 1. The signals good on the MN and W1 charts, 2. there's an easy 1:1.5 and 3. What happened in Catalonia today is fucking disgusting.

Learning to Trade pt3

In part 2 I tried to speak about the importance of trading in your own vision. In this final part, I wanted to talk about ways we can refine our vision and edge.

(Links to part 1 and part 2 if your interested)

play like an amateur; enjoy the game

Ultimately this is a zero-sum game, so you must enjoy the competition! To do this you need to go beyond the one dimension of your own game. Your opponent is always going to have a completely opposing view to yours. They are going to try and run your stops and make you doubt your strategy everywhere they can. They will do this wittingly, purposefully trying to throw you off your game and unwittingly, by simply being true to their beliefs. So you need to...

1. learn your style's strengths and weaknesses
2. understand how and where others will try to implement their style and exploit yours by getting into the habit of seeing every trade from both a bull and a bear's perspective 

Once you start to develop this broader view, you will begin to compete intelligently rather than emotionally. Win or lose, you will build self-respect and confidence, because you're playing the game for what it is. If you lose, you gave them nothing easy, if you win, you took part in making the trade a success. Amateurs understand and enjoy these battles and accept that losing them from time to time is the price of competing. In fact, more than that, they say "well done, I see what you did there"or "tut" at themselves for failing to do something they know they should have. It does not throw them off their game, it only makes them enjoy it more. Because this is the game.

Personally, I believe I am just about at this stage.

the pro: never stops learning 

Now the following is purely conjecture as I am certainly not at this stage but as I understand it; where the Pro differs from the amateur is in their acceptance that they will always be a student of the market.

One thing I would say with a little more certainty is, again, that as I understand it, this where the serious back-testing should commence if you're so inclined. I say this because this is what my coach has always alluded to in his instructions which to paraphrase were: Find a system that you understand, forward test it to see if it suits you and to learn some KPI's, as it's starting to fall into place come and see me again so we can review it  and you can spend some time backtesting to further refine your edge/KPIs.

We can continue our education by.

1. Continuously recording our data and learning our KPIs
2. Continued studying of the world and market events
3. Journalling our trades and thoughts and exploring them
4. Getting independent input and coaching in regards to our strengths and weaknesses
5. Start comprehensive backtesting to further extend our KPI knowledge and insights into our method. My buddy has written a great post on backtesting on his blog
6. Work with other traders to help, test, push and encourage good habits, better practices and fresh ideas. Something I was thinking about in a previous post on building a Trade Team

Trade Team

Last week I wrote a comment on a friend's blog. Luckily he found it of use and kindly put it up as a blog post of its own, you can read it here if you're interested. On this occasion, I haven't reblogged his post as it felt silly to have three versions of exactly the same thing rattling around the internet. However, the exercise got me thinking about the continuing struggles we all go through when learning to trade and things I'd like to do to combat them.

trader / athlete

I often think of traders as aspiring professional athletes; hours and hours per day training, extremely strict routines, diet, mindset, psychology, studying etc. But the difference between the two professions is the distinct lack of support even professional traders have. Athletes have coaches for technique, coaches for strategy, coaches for routine, dieticians, physios, psychotherapists, training partners and teammates at their disposal every day! Even hedge funds and investment banks don't provide this kind of support to their traders.

I rarely mention it here but I was an amateur boxer for many years and I am now (after quite some time off) training at an MMA gym with an idea to compete at some point in the future. At my gym, I have unlimited lessons, 3 Brazilian Jiu Jitsu coaches, an MMA coach, a Muay Thai coach, a Boxing coach, a Wrestling coach, a Judo coach and a Strength and Conditioning coach. I get one-to-one coaching for an hour a week and I have 200+ training partners and 50+ teammates (those who are looking to pursue fighting). For all this, I pay £230 per month (the private sessions are what drive the cost up). But even so, this is extremely cheap when you think of all the support that is available to me.

Having said all this, what I would say is that in terms of progress, every part is equally important. You, of course, need your coaches to instruct you but you have to have your training partners to drill with and teammates to encourage you. Without them, you wouldn't last long. It's a hard sport that is designed to make you quit, a bit like trading really.

trade team

As traders, I doubt we will ever be able to get the same amount of support that is available to sportsmen and women but like my trading coach has always said, we could be far more effective in the way we utilise each other. I think much of what is lost in trading is the comradeship of a team, too often we fall into a slightly competitive mindset with each other, most likely due to the nature of the game we play. 

When I wrote my comment on my friend's blog I wanted to be his teammate. I wanted him to feel like someone had his back and would go to war with him. This is the feeling you get when you're in a fight team, you train with each other, you sweat together, struggle together and win together. We're honest when someone's doing something wrong, encouraging when they're doing something right and playfully competitive when you're able to be.

Going forward I would like to pursue this idea of building a "trade-team". A band of traders who go to war together. It's great to share victories and commiserate losses, however, I feel often when you need the support is when you're in the trade. In the midst, is often when you most need an objective friend, to either encourage you to continue with the game plan or tell you it is no longer working and to change tactics.

If anyone is interested in this trade team mentality drop me a comment below.

Weekly System (for 2 Year Plan)

overview

In my last post, I talked about my 2-year goal and outlined a very broad system: plan my trade, trade my plan, manage my trade, record my trade, build my numbers up and learn my KPIs.

This a nice sound bite but actually, it provides very little in the way nourishment or sustenance for the tired trader/investor at the end of each day. What follows is a breakdown of what actually needs to be done. To clarify this information is in my TTP and SBP but is not as clear or concise as it is here, I will print this off.

weekend system

The weekend marks the start of my trading week and is when I do the majority of my work. There are 4  major jobs which consist of 9 tasks, I find I need to take a short break between each job.

Week to week my energy levels differ, so it is hard to specify an exact time to as when this work should be completed. What I can say though is that in order of preference they would be 1, Saturday Morning, 2 Saturday Afternoon, 3. Sunday Morning, 4 Sunday Afternoon, 5 Sunday Evening,

job 1: markets

1. Monitor the MOTR (Momentum and Trend) of each market (approx 40) (MOTR)
2. Find potential W1 and MN trades (MN, W1 candle setups with momentum)

3. Define where the MOTR Matrix is heading to across the markets.

job 2: trades

4. Update profiles,  add those with matching MOTR, remove those without (D1 long/short watchlist)
5. Review profiles for setups (D1 long/short watchlist)
6. Review potential trades, do they pass all your requirements (ie pin bar tail at least 60% of candle)

job 3: review

7. Review trade sheet and journals if appropriate. This needn't take ages. Just a weekly check-in to take stock and remind yourself of your KPIs.

job 4: broader themes

8. Research economic data due for the upcoming week.
9. Be aware of the current themes (FTWeekend and MoneyWeek).

daily system

Each evening I have 3 jobs consisting of 5 tasks.

job 1: themes

1. Stay abreast of news developments (twitter and FX street app)

job 2: trades

2. manage open positions (end-of-day).
3. Check for new D1 trades in Long and Short Profiles (end-of-day).
4. Review potential trades, ensure they match trade criteria.

job 3: record

5. Record closed trades (Journal and Trade Sheet)